Finding Financial Freedom
Wait patiently
Interdependent Truth
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Work Gloriously
Wait Patiently
Live Simply
Give Generously
Celebrate Community
Wait Patiently
• Impatience is very costly
Wait Patiently
• Impatience is very costly
• When patience runs out somebody is going to
get hurt...
Proverbs 22:7
“The rich rule over the poor and the borrower
becomes the lender’s slave.”
Romans 13:8
“Let no debt remain outstanding, except the
continuing debt to love one another.”
Case Study
• After working out the numbers you figure that
you can buy a car for about R2200/month.
(Excluding maintenance, insurance, running
costs etc.)
That means that you could finance:
• A car for R100 000
That means that you could finance:
• A car for R100 000
• @ 11%
That means that you could finance:
• A car for R100 000
• @ 11%
• Over 60 months (5 years)
That means that you could finance:
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A car for R100 000
@ 11%
Over 60 months (5 years)
Monthly payment of R2174
That means that you could finance:
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A car for R100 000
@ 11%
Over 60 months (5 years)
Monthly payment of R2174
You pay R30 455 in interest.
OR - You could finance:
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A car for R50 000
@ 11%
Over ??? months (v 5 years)
Same monthly payment of R2174
You pay ??? in interest.
The comparison
Price
Interest Rate
Monthly
Payment
Term
Total Interest
R100 000
11%
R2174
R50 000
11%
R2174
60 Months (5
years)
R30 455
23 Months
(< 2 years)
R6 409
Because you have learnt to save...
• You then save your R2174 for the remaining
37 months @ 5% = R87 136.
Because you have learnt to save...
• You then save your R2174 for the remaining
37 months @ 5% = R87 136.
• (Actual savings could be even higher if you
had placed this money in your bond, should
you have one.)
Let’s assume at least 50% depreciation
in tradable value over the 5 years.
• R100 000 option: After 60 months you have a
car to trade in @ R50 000
Let’s assume at least 50% depreciation
in tradable value over the 5 years.
• R100 000 option: After 60 months you have a
car to trade in @ R50 000
• R50 000 option: After 60 months you have a
car to trade in @ R25 000 and R87 136 saved
for a total of R112 136
Let’s assume at least 50% depreciation
in tradable value over the 5 years.
• R100 000 option: After 60 months you have a car
to trade in @ R50 000
• R50 000 option: After 60 months you have a car
to trade in @ R25 000 and R87 136 saved for a
total of R112 136
• For the exact same monthly expense you have a
124% improvement!
For the boffins...
• Where interest rates go up the advantage will
become even greater.
For the boffins...
• Where interest rates go up the advantage will
become even greater.
• While maintenance may be more, this is
somewhat offset by lower insurance.
For the boffins...
• Where interest rates go up the advantage will
become even greater.
• While maintenance may be more, this is
somewhat offset by lower insurance.
• If the 5 year depreciation is more than 50%,
which is not unlikely, the percentage
improvement of “option B” would be even
greater.
It is not a Trick
• It is nothing less than a lifestyle choice shaped
by your values!
It is not a Trick
• It is nothing less than a lifestyle choice shaped
by your values!
• You learn to be your own banker, using money
from your savings to finance future needs.
• Biblical counsel is not just “spiritual”, it is
financially smart.
• Biblical counsel is not just “spiritual”, it is
financially smart.
• It is either extravagance or impatience that
gets too many of us into a spiral of debt.
• Biblical counsel is not just “spiritual”, it is
financially prudent.
• It is either extravagance or impatience that
gets too many of us into a spiral of debt.
• If you do not develop the discipline of saving,
you can never avoid the inevitability of debt.
Different Kinds of Debt
• Consumer debt
Different Kinds of Debt
• Consumer debt
• Debt on depreciating assets
Different Kinds of Debt
• Consumer debt
• Debt on depreciating assets
• Debt on appreciating assets
Escaping Debt
• If you are in a hole, stop digging!
Escaping Debt
• If you are in a hole, stop digging!
• Develop a repayment plan, starting with your
most expensive debt.
Escaping Debt
• If you are in a hole, stop digging!
• Develop a repayment plan, starting with your
most expensive debt.
• Make yourself accountable to someone you
trust.